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Tag: AdSurfDaily

  • Bogus Magazine Cover Depicts Alleged Ponzi Schemer Charles Scoville Of Traffic Monsoon As 2016’s Best CEO

    This bogus Forbes' cover says Charles Scoville was 2016's BEST CEO. (Red markings by PP Blog.)
    This bogus Forbes’ cover says Charles Scoville was 2016’s BEST CEO. (Red markings by PP Blog.)

    DISCLOSURE: The PP Blog is a Google publisher.

    A bogus cover of Forbes magazine circulating on Facebook depicts SEC Ponzi defendant Charles Scoville of Traffic Monsoon as the “BEST” CEO of 2016 — all while misspelling his last name.

    The image, which falsely showcases the Forbes’ issue as a “LIMITED EDITION,” appears today on the “TrafficMonsoonupdates” page on Facebook, a cheerleading site for the alleged Ponzi scheme. The post comes at a time that both Facebook and Google have been criticized for not screening out fake news during the recent U.S. presidential election.

    Scoville, of Utah, was not named the best CEO by Forbes either before or after the SEC alleged in July that he was at the helm of a Ponzi scheme that had gathered more than $207 million and had affected at least 162,000 investors across the globe.

    And despite the implication that Forbes had named Traffic Monsoon the “BEST TRAFFIC EXCHANGE IN THE WORLD,” no such thing happened. The SEC’s case against Scoville and his company is still being actively litigated, according to the website of the court-appointed receiver for Traffic Monsoon.

    It is not unusual for promoters of HYIP schemes to claim major publications have lauded them or even that U.S. Presidents supported them. Prior to its 2014 collapse, the TelexFree Ponzi- and pyramid scheme wrapped logos of local TV stations into its promos to imply endorsement. TelexFree may have generated more than $3 billion in illicit transactions.

    In 2008, the $119 million AdSurfDaily Ponzi scheme falsely claimed then-President George W. Bush had given ASD operator Andy Bowdoin a special award for business achievement. An ASD knockoff scam known as AdViewGlobal fraudulently traded on the logos of Forbes and other publishers in 2009.

    A current fraudulent scheme known as OneCoin also has traded on the name of Forbes, according to BehindMLM.com. Earlier, promoters of the WCM777 scam implied the endorsement of the Wall Street Journal.




  • TELEXFREE: Prosecutors Docket Prospective Witness List And Exhibits Against James Merrill: Understanding The Background

    EDITOR’S NOTE: This story, which easily could be titled “What NOT To Do In MLM,” summarizes a few of the witnesses and exhibits the U.S. government may use against TelexFree’s James Merrill when his trial gets under way Oct. 24 in Massachusetts. The background provided below is based on research by the PP Blog. Prosecutors filed their witness/exhibit lists on Sept. 26 in U.S. District Court. For our Brazilian readers, we’ll note here that the United States is expected to call at least one member of the Brazilian Federal Police to testify. U.S. District Judge Timothy S. Hillman is presiding. In total, dozens of witnesses may testify, including some who have been sued by the SEC, TelexFree Trustee Stephen B. Darr or private attorneys. There are hundreds of government exhibits, some collected by the Massachusetts Securities Division and the U.S. Department of Homeland Security.

    **______________________**

    EXHIBIT: The government may introduce a document filed by TelexFree with the Alabama Public Service Commission in March 2014.

    BACKGROUND: This document potentially could be used to demonstrate Merrill lied to regulators and business consultants. It was filed on March 20, 2014, and asserts TelexFree was “financially qualified” to operate in the state as a telecom company and that its “current financials Show considerable net worth.”

    Less than a month later, however, TelexFree filed for bankruptcy, raising questions about the truthfulness of its telecom applications in various states. The document, which the PP Blog published before TelexFree’s bankruptcy filing, also ties Merrill to Indiana MLM accountant Joe Craft, a former interim TelexFree executive listed Sept. 26 by the government as a witness. Craft was sued alongside Merrill and others by the SEC in April 2014. He later filed a pleading in which he said he had concluded TelexFree was a Ponzi scheme selling unregistered securities and that he had been misled by TelexFree insiders.

    Joseph Isaacs, a Florida-based consultant for TelexFree, helped prepare TelexFree’s telecom filing in Alabama and other states. Isaacs also now is listed as a government witness. Filings in Missouri say Isaacs told regulators there that Merrill had not been truthful when submitting an affidavit.

    tfwcmmerrillsuv-1EXHIBIT: The government may introduce a photo of Merrill posing with a Hummer vehicle in TelexFree promos.

    BACKGROUND: Ponzi/pyramid schemes and flashy rides are virtually inseparable.

    In 2014, a federal judge ordered TelexFree pitchman Santiago De La Rosa — an SEC defendant — to sell two BMWs and a Land Rover Range Rover. De La Rosa now is listed as a government witness.

    EXHIBIT: The government may introduce a September 2013 email that shows Merrill was aware of a criminal indictment and prison term imposed against AdSurfDaily President Andy Bowdoin in a Ponzi case with remarkable similarities to TelexFree.

    BACKGROUND: The email described above allegedly was sent to Merrill by MLM attorney Jeffrey Babener. Babener now is listed as a government witness. Darr, the bankruptcy trustee, has said Babener informed TelexFree in August 2013 that it was operating a pyramid scheme, but TelexFree nevertheless continued to gather money.

    The ASD case, which also came up in the prosecution of Zeek Rewards’ operator Paul Burks, potentially could be used to demonstrate Merrill was engaging in willful blindness in his operation of TelexFree.

    One of Merrill’s MLM attorneys — Gerald Nehra — has been sued by Darr, private attorneys and the court-appointed receiver in the SEC’s case against Zeek. Nehra also was a figure in the ASD case. He now is listed as a government witness against Merrill.

    EXHIBIT: A video by Thomas More of Newport Beach, Calif.

    BACKGROUND: The SEC has warned for years that scams spread on social media. More, now listed as a government witness, was a TelexFree pitchman who was listed as a “winner” in the Zeek Rewards Ponzi- and pyramid scheme. Nehra once was a speaker at a TelexFree event in Newport Beach.

    EXHIBIT: Records from various banks and financial vendors for Merrill or TelexFree.

    BACKGROUND: Follow the money.

    NOTE: Our thanks to the ASD Updates Blog.




  • SINISTER: TrafficPowerline, A Ponzi-Board ‘Program,’ Threatens BehindMLM

    “The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. ‘Programs’ that have appeared on that forum have caused billions of dollars in losses globally.” — PP Blog, Sept. 5, 2016

    trafficpowerlinelogoTrafficPowerline, a “program” whose thread-starter at the MoneyMakerGroup Ponzi forum has more than 4,700 posts, reportedly is threatening BehindMLM.com because of a negative review. (More on the bizarre and sinister threat to artificially link BehindMLM to malware and porn below.)

    The mere presence of TrafficPowerline on MoneyMakerGroup suggests tainted proceeds from any number of scams could be flowing to the emerging program. “proReflex” is the starter in a thread dated July 23. The post begins with the classic line of “I am not the Admin.”

    MoneyMakerGroup is listed in U.S. federal court files as a place from which Ponzi schemes are promoted. Infamous schemes such as Zeek Rewards, AdSurfDaily, TelexFree and many others were listed there, contributing to a condition under which polluted money flows from scheme to scheme to scheme.

    A “program” similar to TrafficPowerline — Traffic Monsoon — was shut down by the SEC on July 26, just three days after TrafficPowerline made its MoneyMakerGroup debut. Like TrafficPowerline, TrafficMonsoon was a Ponzi-board scheme.

    In a post dated Sept. 5, BehindMLM reported that Pearse Donnelly of TrafficPowerline and an earlier scheme known as “MoBrabus” was the source of the threat. MoBrabus also was listed on the Ponzi boards. One of its payment processors was Payza, which the court-appointed receiver in the Zeek case has accused of facilitating that mammoth, cross-border scheme.

    Donnelly, according to BehindMLM, demanded the review be taken down within 72 hours or else a “negative SEO” campaign against BehindMLM would begin.

    Tools used against the well-known review site would include “SGA, Xrummer, Scrape BoX, SeNuke and other SEO tools at our disposal or from service providers to create thousands of low PR, PBN, PN, Porn, Link Farms and Malware site backlinks to your site along with teen-girl 10% free sex online 9% harmful for your computer 8% do not open this link 8% porn 8% adult content harmful 8% computer virus 8% dangerous 8%.”

    The apparent TrafficPowerline aim is to artificially damage BehindMLM’s worth with Google and other search engines through fraudulently placed links.

    Despite bizarrely claiming he was “nicely” requesting BehindMLM to kill the review and not issuing a threat. Donnelly reportedly went on to write that “I am fucking serious OZ do not fuck with me take down the fucking pages or I will make it my little project to fuck your site up.”

    The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. “Programs” that have appeared on that forum have caused billions of dollars in losses globally.

    Sites sometimes have been known to overplay their hands when trying to bludgeon critics. KlearGear.com allegedly once threatened negative reviewers with a fine of $3,500. The site ended up getting sued by a public advocacy group.

    Because the PP Blog today was able to access the TrafficPowerline website, it means the site is accessible in the United States — after the TrafficMonsoon case and the allegations of securities fraud and after California passed a law that backs consumers if companies try to strongarm consumers by limiting speech through nondisparagement clauses.




  • ‘TRAFFIC HURRICANE’: Reload Scheme Targets Traffic Monsoon Participants And Tries To Gag Reporters

    traffichurricanelogoIn the aftermath of the SEC’s Ponzi action against Traffic Monsoon last month, a website styled TrafficHurricane.plus has gone live and has a sign-up page. Ponzi-friendly Payza and SolidTrustPay are the listed money-movers.

    There are many items of interest on the Terms page, including exceptionally awkward English syntax and a preemptive bid to gag reporters.

    On the syntax front: “You are under the money laundering prevention law . . .”

    On the effort-to-gag front: “If you are not a member you are prohibited from modifying, copying, distributing, transmitting, publishing, selling, creating derivative works and / or using any information available on and / or through TrafficHurricane.”

    The PP Blog accessed the Traffic Hurricane page from the United States today. Given the Traffic Monsoon example and other examples in recent years, U.S. law enforcement may deem the offer as an offering of securities targeted at unaccredited investors in the United States and elsewhere.

    Traffic Hurricane has the hallmarks of a securities reload scheme and reportedly is hosted on the same server as TrafficMonsoon.plus, which appears to have been an earlier effort to launch a reload scheme. TrafficMonsoon originally operated at TrafficMonsoon.com, but that page now resolves to the website of the court-appointed receiver in the TrafficMonsoon case.

    In the HYIP sphere, reload schemes are somewhat common and provide a means by which victims get scammed a second time. Such schemes typically surface when a initial scheme displayed an incredible ability to gather money and line up suckers. Promos for Traffic Hurricane already are running on Twitter.

    The SEC said Traffic Monsoon rounded up more than $207 million. The agency’s complaint says the “program” had more than 162,000 investors.

    Apparently only in operation for a couple of days, Traffic Hurricane this morning said on its landing page that it already had 5,111 members. Like Traffic Monsoon, Traffic Hurricane says it is an “advertising” program.

    The situation is reminiscent of the 2008 AdSurfDaily “advertising” Ponzi scheme shut down by the U.S. Secret Service. ASD sparked at least three reload schemes, including one called AdViewGlobal. Investigators later linked ASD President Andy Bowdoin to AdViewGlobal. Because of AdViewGlobal, a federal judge revoked Bowdoin’s bond in the ASD Ponzi case.

    Charles Scoville, the alleged operator of Traffic Monsoon, has not been charged criminally. It is unclear whether a criminal investigation is proceeding on a parallel track with the SEC’s civil action against Scoville and Traffic Monsoon, but similar schemes have triggered criminal probes.

    BehindMLM.com, quoting TrafficMonsoon cheerleader Sharon James, is reporting Ernie Ganz is behind Traffic Hurricane.

    Other than the core business model and the reload schemes, TrafficMonsoon is like AdSurfDaily in other key ways.

    Traffic Monsoon supporters on social-media sites, for example, virtually are confessing their desire to engage in securities fraud on a global scale. Any number of them are using ASD-like arguments such as “we aren’t selling securities because we announced we weren’t selling securities” and payouts were never guaranteed.

    There also are ASD-like petition drives and various efforts to raise funds to fight the U.S. government. (See June 16, 2011, PP Blog editorial,  “The AdSurfDaily Solution.”)

    Like Traffic Hurricane, the AdViewGlobal knockoff scheme also tried to gag critics.




  • Private Attorneys Now Investigating Traffic Monsoon

    Charles Scoville: From YouTube.
    Charles Scoville: From YouTube.

    UPDATED 1:15 P.M. EDT U.S.A. It has happened in previous cases involving alleged violations of federal securities laws, and now it’s happening with Traffic Monsoon.

    “The Peiffer Rosca Wolf law firm is investigating Traffic Monsoon, LLC and Charles Scoville’s alleged Ponzi scheme on behalf of investors – whom Traffic Monsoon called ‘members,’” the firm said in a PR release today.

    How the firm would proceed is unclear. The announcement, however, potentially means Traffic Monsoon and Scoville will be facing litigation on a front separate from the Ponzi case filed by the SEC on July 26.

    After the 2008 AdSurfDaily Ponzi case was filed by the U.S. Secret Service, private attorneys filed a racketeering complaint against ASD operator Andy Bowdoin (and others) that helped out a second Ponzi scheme known as AdViewGlobal.

    Class-action attorneys also filed complaints in the TelexFree and Zeek Ponzi- and pyramid cases. Certain TelexFree-related actions alleged racketeering and referenced a “program” similar to Traffic Monsoon: My AdvertisingPays. There also were counts of fraud against TelexFree principals and some individual promoters.

    Even if they don’t result in a recovery, the actions filed by private individuals — as opposed to government plaintiffs — force defendants to confront litigation on multiple fronts. Defense costs may soar.

    “The Peiffer Rosca Wolf lawyers are preparing to take action and seek compensation on behalf of those who invested in the alleged Ponzi scheme orchestrated by Traffic Monsoon and Scoville,” the firm said.

    Traffic Monsoon gathered at least $207 million, according to the SEC.




  • Some Traffic Monsoon Promoters Are Zeek Clawback Defendants

    trafficmonsoonlogoUPDATED 11:51 A.M. EDT U.S.A. Zeek Rewards’ receiver Kenneth D. Bell had no comment this morning on reports that some Zeek clawback defendants also were participants in Traffic Monsoon, alleged last week by the SEC to have been a Ponzi scheme that had gathered at least $207 million.

    The reports appeared on RealScam.com.

    In March 2015, Bell sued Adrian Hibbert of the United Kingdom, alleging he had received more than $82,000 in Ponzi proceeds from Zeek. Zeek was charged with fraud by the SEC in August 2012.

    Another Zeek promoter listed by Bell as a winner in that scheme — Frank Calabro Jr. of the United States — also promoted Traffic Monsoon. Bell has expressed concern about online pitchmen moving from one fraud scheme to another.

    “Winnings” from MLM or direct-sales fraud schemes may be subject to return through clawback litigation.

    Both Zeek and Traffic Monsoon were purported “revenue sharing” programs. Paul Burks, the operator of Zeek Rewards, potentially faces a long prison term after his conviction earlier this month on multiple fraud counts.

    On July 26, the SEC civilly charged alleged Traffic Monsoon operator Charles Scoville of Utah with fraud. He has not been charged criminally and is believed to be residing overseas.

    Peggy Hunt of the Salt Lake City office of the Dorsey & Whitney law firm has been appointed receiver over Traffic Monsoon. Neither she nor the firm responded immediately this morning to a request for comment on the issue of common promoters between Traffic Monsoon and Zeek.

    The law firm confirmed to the PP Blog last week that there would be a receivership website for Traffic Monsoon, but the site was not yet live. The URL has not been released.

    Some Zeek clawback defendants also were participants in the AdSurfDaily Ponzi scheme. ASD was a “program” similar to Traffic Monsoon broken up by the U.S. Secret Service in 2008 in a highly publicized action.

    In U.S. domestic clawback litigation and in cases filed against non-U.S. residents, Bell has sued thousands of alleged Zeek winners for return of their gains and interest.

    Hunt’s plans with Traffic Monsoon are unclear.

    Hibbert appears also to have a page promoting the “My Advertising Pays” scheme.  MAPS, as it is known, has caught the attention of class-action attorneys involved in litigation against the TelexFree scheme broken up by the SEC and the U.S. Department of Homeland Security in 2014. The litigation also includes Zeek figures.

    TelexFree and Zeek may be the two largest combined Ponzi- and pyramid schemes in history, generating on the order of $4 billion in illicit, cross-border business and affecting hundreds and hundreds of thousands of people.

    The MAPS’ page attributed to Hibbert claims that MAPs operator Mike Deese “has been in the trenches with Zeek, ASD, Banners Broker, Ad Hit Profits, and many other advertising revenue sharing companies some of which continue to thrive and some that are not.”

    AdHitProfits also was a Scoville scheme. BannersBroker was a cross-border fraud that led to arrests in Canada.

    Separately, the Zeek page attributed to Hibbert claims, “If you want to make money and get paid everyday, you have to look at Zeek Rewards and understand how it works.”

    The SEC and federal prosecutors in the Western District of North Carolina said Zeek worked as a Ponzi scheme.

    Visit the TrafficMonsoon thread at RealScam.com.




  • TRAFFIC MONSOON: Whack-A-Mole — For Sure

    trafficmonsoonlogoNews came early this morning that the SEC had moved against Traffic Monsoon, calling it a Ponzi scheme. Both the “program” and alleged operator Charles Scoville were charged civilly yesterday in Utah federal court with securities fraud and selling unregistered securities to unaccredited investors.

    Scoville also was the braintrust behind AdHitProfits, a Ponzi-board “program” in part targeted at people who also were targeted in the egregious 2013 Profitable Sunrise cross-border scam in which millions of dollars appear to have vanished overseas.

    As the PP Blog reported on June 2, 2013 (italics added):

    A spammer hit a Profitable Sunrise Facebook site yesterday with five drive-by offers for “AdHitProfits.” All five of the machine-gunned theft bids claimed the same thing: “make money every half an hour…100% commission let your money grow for you at high speed.”

    The AHP “program” also is being pitched on the Ponzi boards, with the thread-starter at MoneyMakerGroup bragging that “Payza, []STP & Liberty Reserve Accepted !!”

    LibertyReserve was described last week by federal prosecutors in New York as a criminal enterprise that had laundered more than $6 billion for Ponzi schemers, credit-card fraudsters, identity thieves, investment fraudsters, computer hackers, child pornographers and narcotics traffickers.

    Traffic Monsoon allegedly used PayPal, SolidTrustPay and Payza, a processing firm under fire from the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case. Payza also is involved in a federal investigation centered in the District of Columbia.

    In its complaint against Traffic Monsoon and Scoville, the SEC says PayPal restricted Traffic Monsoon during the winter, in January 2016.

    Our research shows that Scoville then turned to Payza for the heavy lifting and that Payza attended a Traffic Monsoon event in May 2016, during the spring and while funds in PayPal had been frozen by PayPal.

    From the SEC complaint (italics added):

    After the PayPal freeze, Scoville began using other payment processors more extensively: Solid Trust Pay, headquartered in Ontario, and Payza, headquartered in London with offices in New York. He has also used an account at JPMorgan Chase to receive investor funds.

    Zeek used both SolidTrustPay and Payza, as did the AdSurfDaily Ponzi scheme before it.

    Traffic Monsoon’s haul appears to have exceeded $200 million, potentially making it one of the largest advertising “revshare” schemes of all time. As things stand, it is larger than other well-known revshare frauds such as AdSurfDaily ($119 million) and Banners Broker ($156 million). Some of the Banners Broker cash reportedly ended up in KulClub, yet another Ponzi-board MLM scheme.

    Ponzi-board schemes are eviscerating wealth globally. It is not unusual for such schemes to use multiple payment processors and to target vulnerable population groups. Agencies from the U.S. Department of Homeland Security have been involved in a number of major investigations of Ponzi-board “programs.”

    It is unclear if DHS or other U.S. agencies with the power of arrest are involved in a Traffic Monsoon probe. History has shown, however, that when the SEC brings a civil case, other agencies sometimes carry out criminal investigations on a parallel track.




  • REPORT: SEC Moves Against ‘TrafficMonsoon,’ Calls It A Ponzi

    trafficmonsoonlogoThe SEC has filed a lawsuit against the Traffic Monsoon “program” and called it a Ponzi scheme that had gathered $207 million, the Salt Lake Tribune is reporting.

    The assets of Traffic Monsoon and alleged operator Charles Scoville have been frozen, the newspaper reports.

    On June 1, the PP Blog reported that Payza — a payment processor under fire from the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid case brought by the SEC in 2012 — bragged about its attendance at a Traffic Monsoon event in May.

    Zeek’s Paul Burks was found guilty last week of multiple felonies for his operation of Zeek, a purported auction “program.”

    Traffic Monsoon, which may be a whack-a-mole scheme, is a purported “advertising “program” similar to the AdSurfDaily Ponzi scheme and other scams, including Banners Broker.

    The SEC warned about whack-a-mole schemes in March.

    More as the situation develops . . .




  • Baton Rouge Cop-Killer Was ‘Sovereign Citizen’ And ‘Moor’ — And Also Claimed To Have Been In Dallas

    Gavin Eugene Long, the alleged mass murderer of police officers in Baton Rouge yesterday, was a “sovereign citizen” and “MOOR,” according to a bizarre filing in his name last year with the recorder of deeds in Jackson County, Mo.

    The news of the filing appeared in the Kansas City Star. Here is a copy of Long’s rambling narrative in which he purportedly changed his name to “Cosmo Ausar Setepenra.”

    CBS News reported Long, a Kansas City native, claimed to have been in Dallas after the July 7 ambush murders of five police officers there by Micah Xavier Johnson.

    “Sovereign citizens” form an irrational belief that laws to not apply to them. African Americans who may self-identify as “sovereigns” sometimes express an affiliation with Moors or Moorishness. Long, killed after reportedly ambushing police, was African American.

    Published reports have described Long as a self-identified “nutritionist, life coach, dietitian, personal trainer, author and spiritual adviser.” Three law-enforcement officers died in Baton Rouge yesterday. Three others were injured.

    Some “sovereigns” have participated in HYIP schemes such as AdSurfDaily, Zeek Rewards, JustBeenPaid/JSS Tripler and DFRF Enterprises.

    Visit the PP Blog’s tag archive on references to “sovereign citizens.”




  • Grand Jury Was Meeting When Some Zeekers Waged Misinformation Campaign; Prosecutors Question Veracity Of Burks’ ‘Handwritten Notebooks’

    Paul Burks
    Paul Burks

    New filings by federal prosecutors in the criminal case against Zeek’s Paul Burks reveal that a grand-jury investigation was under way within days of the SEC’s Aug. 17, 2012, shutdown of the “program” and confirmation by the U.S. Secret Service that it also was investigating Zeek.

    Burks was subpoenaed by the grand jury on Aug. 24, 2012, and testified before the panel less than a month later, on Sept. 20, 2012, according to prosecutors. He ultimately was indicted by the grand jury in October 2014, more than two years after the August 2012 subpoena and his subsequent appearance the following month.

    Whether others within Zeek also had been subpoenaed or had knowledge of Burks’ appearance is unclear. What is known is that a group of Zeek members — during the same 2012 time period — embarked on a fundraising campaign while accusing the SEC of misleading a federal judge and admitting it had a weak case.

    One of the members of the group was Todd Disner, a former winner in the AdSurfDaily Ponzi scheme later identified as a major winner in the Zeek scheme. Zeek receiver Kenneth D. Bell has raised the issue of serial promoters moving from one fraud scheme to another.

    Bell specifically has referenced ASD. Federal prosecutors have, too.

    Given that ASD operator Andy Bowdoin is in federal prison for running a Ponzi scheme and Zeek’s “program” was similar to ASD in key ways, events at ASD could be problematic for Burks. How did Disner, for example, end up at Zeek?

    Despite knowing about ASD in 2011, Burks nevertheless moved forward with Zeek, prosecutors contend.

    The government is arguing that the ASD fraud put Burks on notice of his own fraud and that evidence pertaining to ASD should be admissible.

    Precisely what the government intends to introduce about ASD is unknown. But as part of his defense, Burks is asking U.S. District Judge Max O. Cogburn Jr. to exclude evidence about ASD.

    “This case is about Paul Burks, Rex Venture Group, Zeekler.com, and ZeekRewards.com,” Burks advised Cogburn in a June 28 trial brief. “It is not a referendum on direct selling or multi-level marketing programs. The trial of this case is not the time, or the place, for a jury to render a verdict on these types of companies or programs, which are perfectly legal yet regularly criticized.

    “It is also not about corporate malfeasance or wrongdoing by others, which is precisely what the Government seeks to convey to the jury by referencing ASD. Accordingly, the Government should be barred from any reference ASD, or any other entity whose conduct is completely irrelevant to the facts of this case. Even if there is some limited relevance to ASD (it is mentioned in government witness interviews), the Court should bar any mention of ASD since the limited probative value of such evidence is substantially outweighed by a danger of unfair prejudice, confusion, being grossly misleading, and inviting a trial-within-a-trial.”

    Burks’ trial on charges of wire fraud, mail fraud, conspiracy to commit both and conspiracy to commit tax fraud is scheduled to get under way July 5.

    We’re working on a story that will cover other elements of his defense.

    In a development yesterday, the government contended Burks withheld “purported” handwritten notebooks from the grand jury during his September 2012 appearance and didn’t turn them over until April 2016.

    Burks now wants to use the “unauthenticated” notebooks as a trial exhibit and as the basis for the opinions of expert witnesses he intends to call, prosecutors argued.

    “Defendant’s failure to produce these documents in response to the Grand Jury testimony, his testimony that he had produced all responsive documents, and the production of these Handwritten Notebooks on the eve of trial, without explanation, all raise serious concerns about the legitimacy of the Handwritten Notebooks,” prosecutors argued to Cogburn.

    NOTE: Thanks to the ASD Updates Blog.




  • FEDS: Having Pocketed $11 Million In 2011, Burks Plowed Forward With Zeek, Despite Knowledge Of AdSurfDaily Ponzi Case

    “Rather, [Andy] Bowdoin manufactured the revenue numbers to deceive members into believing that they could reasonably expect to receive an average daily return on their investment with [AdSurfDaily] of at least 1%. This percentage in no way corresponded to the daily revenue that ASD was generating, but had been determined by ASD’s operators to be the amount needed to attract a steady stream of newcomers.” — U.S. Secret Service affidavit in AdSurfDaily forfeiture case, Feb. 26, 2009

    “Defendant [Paul] Burks simply made up the ‘daily net profit’ without any reference at all to profits. The true revenue from the [Zeek] scheme, approximately 98% of all incoming funds, came from victim-investors . . . [T]he co-conspirators published bogus daily figures of Zeek’s profits, averaging approximately 1.4% a day . . .” — Office of U.S. Attorney Jill Westmoreland Rose, June 24, 2016

    “Burks and his co-conspirators were very aware of ASD and of the fact that it was shut down. For example, on March 26, 2011, a few months after the owner of ASD was indicted, Burks and Dawn Wright-Olivares emailed regarding an affiliate[‘]s advertisement for ZeekRewards that included in the title, ‘[i]f you were in ASD or AVG then you will know how good this is.'” — Office of U.S. Attorney Jill Westmoreland Rose, June 24, 2016

    EDITOR’S NOTE: Prior to the Aug. 17, 2012 fall of Zeek Rewards, the PP Blog reported on a number of similarities between Zeek and AdSurfDaily. (See June 10, 2012, editorial, “A Friday Evening In MLM Radio La-La Land.” Also see Aug. 12, 2012, editorial, “Karl Wallenda Wouldn’t Do Zeek.”)

    **______________________**

    From a Zeek promo.
    From a Zeek promo.

    With the July 5 trial date for alleged Zeek Rewards’ operator Paul Burks fast approaching, federal prosecutors making a case for willful blindness now say Burks and co-conspirator Dawn Wright-Olivares plowed forward even though they were “very aware” of the Ponzi-scheme case against AdSurfDaily and operator Andy Bowdoin.

    In fact, the office of U.S. Attorney Jill Westmoreland Rose said in June 24 filings, the subject of ASD had come up at Zeek at least by March 2011, only a few months after Bowdoin had been indicted in November 2010.

    The triggering event for an email discussion between Burks and Wright-Olivares had been an affiliate’s promotion for Zeek that in part read, “[i]f you were in ASD or AVG then you will know how good this is,” prosecutors said.

    “AVG” is short for AdViewGlobal, a 1-percent-a-day scam Bowdoin and others launched just two months after the U.S. Secret Service, using forfeiture law, seized tens of millions of dollars from Bowdoin for his operation of ASD in August 2008. A federal judge revoked Bowdoin’s bail in the ASD case after she found out about AVG.

    Wright-Olivares, in February 2014, pleaded guilty to criminal charges for her role in Zeek. She and stepson Daniel Olivares, who also pleaded guilty, are expected to testify against Burks.

    The Zeek affiliate’s March 2011 promo using the names of both ASD and AVG prompted Wright-Olivares to advise the affiliate to be “careful with [her] subject line,” prosecutors said. A lecture using all-caps allegedly ensued.

    “We cannot have ZeekRewards compared to ASD or AVG EVER for ANY REASON,” Wright-Olivares allegedly wrote to the affiliate. “They were both shut down. We are very very different from both companies.”

    It was unclear from the filing whether the Zeek affiliate also had belonged to ASD and AVG. Zeek receiver Kenneth D. Bell has raised the issue of some MLMers moving from one fraud scheme to another, actions that lead to a sort of permanent fog of preposterous disingenuousness and willful blindness in the HYIP sphere.

    After ASD had become a topic of discussion inside Zeek in March 2011, the subject came up again in June of that year, prosecutors alleged.

    “Similarly, on June 28, 2011, over [S]kype, Wright-Olivares told Burks that changes needed to be made to the program to make it sustainable,” prosecutors alleged. “Burks retorted: ‘I’m the one with my neck in the noose…not you…If the swat team shows up it’s MY ass in the can…’ Wright-Olivares responded, ‘[i]’ll be there too… they will seize it all and we are liable ask the ASD people.'”

    By June 2011, it was public knowledge that ASD had gathered at least $110 million. Burks’ prosecutors now are suggesting that, despite the lessons of the ASD case, Burks and Wright-Olivares did not abandon Zeek because the money was simply too good.

    “In 2011 alone, Burks received approximately $11 million in income from ZeekRewards out of total revenue of approximately $37 million,” prosecutors alleged in their June 24 brief. They earlier pegged the total haul of Wright-Olivares at about $7.2 million.

    Burks is facing charges of with mail- and wire-fraud conspiracy,  mail fraud, wire fraud and tax-fraud conspiracy. Some MLMers have insisted for years that the issuance of tax forms by a “program” demonstrates no fraud is under way.

    With Zeek, prosecutors have laid bare that notion.

    From prosecutors’ assertions (italics added):

    In total, Defendant Burks, and others, reported to the IRS supposed income by the victim-investors of over $96 million for the year 2011 on the 1099s issued, while ZeekRewards actually paid out less than approximately $13 million in cash to victim-investors during that year. As a result, individual victim-investors filed false tax returns with the IRS reporting phantom income that they never actually received, and Burks, and others were able to use the false tax notices to perpetuate the Ponzi scheme by making the phantom money seem like it actually existed.

    NOTE: Our thanks to the ASD Updates Blog.